Truce of obscurantism. A watt consumed by the Bitcoin network is not necessarily a watt too much. Finally realize that the mining of BTC is a great asset for the energy transition.
Bitcoin (BTC), accelerator of the energy transition
It makes sense to integrate bitcoin miners into power grids turning to renewable energy. It is enough to take a little interest in the functioning of an electrical network to be convinced of this.
Let’s start by saying that the quantity of electricity injected into a network must always be equal to the quantity of electricity consumed. Otherwise, it’s the blackout.
To put it a little more technically, the network must permanently display a frequency of 50 hertz. This frequency is the gauge to ensure that supply equals demand. Any deviation from these 50 hertz is a danger to the safety of the system.
Here is to go further a video of Mr Bidouille who was able to visit the “control tower” of RTE, the manager of the French electricity transmission network. Where we watch those 50 hertz.
In France, the management of the quantity of electricity injected into the network is notably facilitated by our hydroelectric dams. These make it possible to react quickly to unexpected variations in demand. This avoids waste, a luxury that many countries do not enjoy.
This lack of responsiveness has been exacerbated since the beginning of the energy transition due to the intermittency of renewable energies. The vagaries of the weather complicated the life of the electricity network managers. Especially in Germany, when the wind blows too much…
Indeed, electricity from wind power is a priority for our neighbors across the Rhine. Energy distributors are obliged to buy it at a guaranteed price, even if they don’t need it! So much so that in the event of very strong winds, the price of electricity collapses.
The negative consequence is that it becomes more attractive for nuclear power plants to pay for their production to be absorbed rather than bear the costs of shutting down/restarting their plant. Why ? Because nuclear cores are momentarily “poisoned” by their fission products (so-called Xenon or Samarium effects)…
Does this mean that German households pay less for their electricity? No. On the contrary, since the distributors are obliged to buy electricity which, too often, no one needs. This cost will therefore be passed on to the final consumer.
Everyone loses except wind power producers. Unless you include bitcoin in the equation. Let it be said, a Mega watt consumed by a BTC miner is not necessarily a Mega watt too much.
Bitcoin miners could help by settling near nuclear power plants to somehow offset the costs caused by the overflow of electricity induced by the European energy transition. Costs that are likely to grow.
In 2020, onshore wind power generation increased by 144 TWh (+11%) and by 25 TWh (+29%) for offshore wind power. “net zero CO2 emissions in 2050” scenario will require increasing production by 18% per year on average between 2021 and 2030:
Texas is a textbook case given that its electricity comes from 45% renewable energy. Lots of wind, but also nuclear. The rest comes from coal and, above all, from gas recovered during the extraction of shale oil.
The arrival of BTC miners in Texas has strengthened the power grid. They provided a constant lucrative outlet for excess electricity caused by the unpredictability of weather conditions.
That being said, it will be interesting to see if the increase in the price of gas will not encourage some miners to relocate their operations elsewhere, where there are chronic surpluses of renewable energy. This is typically the case with African hydroelectric dams, the production of which takes years to be fully absorbed by the population.
In short, the electricity purchased by BTC miners is a welcome subsidy to finance the energy transition. The latest report from the Bitcoin Mining Council also reveals that 60% of the energy used to secure the network is renewable.
Of course, miners must stop their machines on command. In this way, miners become part of the efficient management of a network by releasing watts instantly.
the mining of BTC must always be deployed in concert with the network managers so as not to deploy too many machines which could ultimately increase the electricity bill of the population.
Sébastien Gouspillou, CEO of the company mining Big Block summed it up well in its report to the Salvadorian government:
” The mining of bitcoins must be socially useful. It should not compete with traditional demand, ever. It must be set up where there is additional capacity in order to optimize the installed capacity/consumption ratio. Organized in this way, the mining becomes a blessing for a country. Otherwise, it can quickly become a threat to the supply of the population and create a kind of chaotic situation. It therefore seems that the mining must absolutely be supervised by the State, both for the comfort of the population and for the reputation of bitcoin. The mining machines must be mobile, in containers, in order to be able to adapt to the evolution of the electrical landscape of the country. »
Bitcoin miners are the buyers of last resort for the renewable energy that no one wants. Each State should integrate it into its financing strategy for its energy transition.
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Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic, and libertarian prisms.